can be defined as a new way for improved products and solutions that a business invents for its clients. A new product, service, process, technology or idea that fulfil the market expectations could be viewed as innovation. Innovation must offer a high delivered value to clients. Innovation is a catalyst for promulgating development and success of any business. It usually begins with a need to do something better than what exists now or to come up with an entirely new solution that is not presently available. In addition, competition promotes the innovation process.
As in other fields, innovation is also very crucial for growth of Small and Medium Enterprises (SMEs). SMEs, being small in size, always strive to perform better, come up with novel solutions and create a niche and demand for their products, services or solutions in the market. That is why SMEs are said to be more innovative vis-à-vis large ones. Moreover, they have a direct dealing with the communities that make them understand the need of the communities. That really prompts the SMEs for looking at innovation that could provide lasting solutions with a difference.
With cut-throat competition among businesses, it becomes imperative for businesses, especially the SMEs, to keep themselves abreast of the market needs and be innovative. In order to retain the customers, have a competitive advantage over its competitors in the market and have a higher market share, an SME requires to make Innovation as part of its development strategy. This will not only make the SMEs firm-footed in the market but also result in financial gains for them. This would, no doubt, help boost the economy of a nation.
Lack of research & development facilities, inability of the SME entrepreneurs to manage technology as a strategic weapon as well as inadequate financial and manpower resources are the major constraints that get SMEs away with internal technology development. And because of this, they largely depend on external technologies. In this context, technology transfer is an important aspect for SMEs. SMEs find various difficulties in Technology Transfer such as technology transfer process issues, corporate capability issues and national innovation system issues that affect their productivity. Hence, government, industry associations, UN agencies and international organizations should work towards lowering these barriers for SMEs. This would help the SMEs to engage in proactive “capture of technology” than in reactive “transfer of technology”.
ISSME develops alternate technology packages for use of SMEs. It also conducts specific workshops to enhance innovation and facilitate technology transfer among SMEs.